Open Europe press summary: 15 October 2009

Europe

'Shoddy book-keeping' of EU farm subsidies leaves taxpayers with 622m bill
The Times reports that taxpayers are to be landed with a 622 million bill for incorrect payments made to farmers after changes to the payments system of the Common Agriculture Policy four years ago, according to the National Audit Office (NAO). In a highly critical assessment, the NAO accused the Rural Payments Agency, which distributes 1.6 billion a year to English farmers, of showing "scant regard to protecting public money" and failing to provide value for money to taxpayers. The report raises serious questions over the future of the agency and the scrutiny of its operations by the Department for Environment, Food and Rural Affairs (Defra).

The FT notes that the changes in 2005 replaced 11 separate subsidies to farmers with a single payment based on land area, but administration of the programme has been dogged with problems from the start. More than 304m has been spent on extra staff to administer the scheme; some 280m has gone in penalties and lost subsidies from the EU because of errors; and a further 43m of overpayments are likely to be irrecoverable. Farmers - many of whom were paid late and some of whom have faced demands for large repayments when in fact they owed nothing - have faced additional costs of more than 50m.

Edward Leigh, Chair of the Commons Public Accounts Committee, is quoted saying, "Because of its shoddy book-keeping, the agency does not actually know the extent of overpayments which could be somewhere between 55m and 90m."

The BBC reports that the NAO said the current average cost of processing a claim in England, Wales and Northern Ireland was now 1,743. This is often much more than the value of the claim itself and is far more than the average of 285 under the simpler Scottish system.
Times FT BBC

Vaclav Klaus: "I fear, and I am not the only one, a deepening of EU integration";
Irish Foreign Minister: There is "ample time" to resolve the Czech issue before UK election
The Telegraph reports that Czech President Vaclav Klaus is currently on a trip to Moscow where he has explained his position with regards to the Lisbon Treaty to the Russian President, Dmitry Medvedev. The Guardian notes this appeared to be a calculated snub to the 27 EU governments who have not had such an explanation.

The Telegraph quotes him saying, "I fear, and I am not the only person to fear, a deepening of EU integration". The Guardian offers a profile of President Klaus and writes, "Opinion is divided in Prague and Brussels over what Klaus intends. He is notoriously unbiddable. Is he seeking a face-saving formula from a European summit at the end of the month? Or are his demands deliberately maximalist so that they cannot be met and the treaty remains unratified?"

The Prague Monitor quotes German MEP Jo Leinen saying: "If he [Klaus] refused to sign the Lisbon treaty after the positive decision of the Czech Constitutional Court, other constitutional institutions should launch impeachment of him".

Meanwhile, the Irish Times reports that Irish Foreign Minister Michel Martin has said, at a meeting of the European Institute in Washington, that he believes the Czech Republic will ratify the Treaty, and that there is "ample time" for the Czechs to resolve the issue before the British election next year. He said that, "The Conservative Party have a very clear view there should have been a referendum", but added, "Successive governments honour agreements entered into previously." Asked whether he had a message for President Klaus, Mr Martin said the EU should not interfere: "In a general sense, it won't be a show-stopper, and within the Czech Republic they will find a solution".

Open Europe's Lorraine Mullally appeared on BBC Radio 5 Live to discuss the Czech situation and to argue that the Lisbon Treaty is bad for democracy.
Guardian Irish Independent Irish Times Neue Rheinische Zeitung PragueMonitor Coulisses de Bruxelles OE blog

Berlusconi backs Blair for EU President
The Times reports that Silvio Berlusconi, the Italian Prime Minister, has written a front-page letter in an Italian newspaper in support of Tony Blair's candidacy for EU President - a post created should the Lisbon Treaty come into force. "Tony Blair has got everything it needs to become the first president of the European Council," he wrote in Il Foglio.

On his Telegraph blog, Benedict Brogan writes, "With an endorsement like that, who needs enemies..."

The Economist's Charlemagne looks at the possibility of David Miliband becoming the EU's Foreign Minister should Blair not get the job of President asking, "Do all the British-specific arguments against Mr Blair also apply to Mr Miliband...?"

PA reports that Lib Dem MEP Chris Davies has thrown his hat in the ring for the job of the EU's President saying, "European citizens should be told whether this is just a beauty contest for middle aged males or a professional recruitment exercise intended to select the best person for the job, someone with ideas about how to shape Europe's future."

The article quotes Open Europe Director Lorraine Mullally saying, "Chris Davies is right - why indeed should the new post be restricted to a select political elite, and why should he or she be appointed by a majority vote in the Council (of EU leaders), instead of by the peoples of Europe? But it's a bit late for Lib Dems to be complaining about the undemocratic posts created by the Lisbon Treaty. It was the Liberal Democrats who effectively blocked efforts to organise a British referendum on the Treaty...It seems a bit hypocritical to start complaining about it now."

European Voice notes that Czech President Vaclav Klaus' refusal to sign the Lisbon Treaty means that the appointment of the EU's top jobs has been pushed off the agenda of the next EU leaders summit in Brussels on 28-29 October.
Times Guardian Guardian: Stelzer Irish Independent Euractiv AGI Telegraph: Brogan blog EUobserver European Voice Economist: Charlemagne's notebook European Voice OE blog

Controversial "leverage caps" for hedge funds may be dropped from AIFM directive
Dutch Daily Het Financieele Dagblad reports that the Swedish EU Presidency has proposed to drop the limits on the amount of money a hedge fund manager is allowed to borrow - limits that are contained in the current draft of the EU's so-called AIFM directive. In a secret compromise proposal, seen by the paper, the Swedish EU Presidency has swept this provision "off the table", the article reports. This has also been confirmed by sources in Brussels, according to the paper. Many member states, including the Netherlands, have resisted a generic limit to investing with borrowed money, a so-called "leverage cap". However, under the proposal, national supervisors will be able to impose extra demands on managers on a case by case basis if they think that the leverage of a specific fund is too high. However, it's unclear whether the EU Commission will also retain a similar mandate to impose ad-hoc limits.

Meanwhile, at the Brussels Network Wednesday Meeting in the European Parliament, Syed Kamall MEP referred to a fund investing in African schools and children in poorer communities, which would be banned from raising funds from investors in the European Union under the currently proposed AIFM Directive.
FD Open Europe press release Open Europe research

Government to delay implementing Temporary Agency Workers Directive
The FT reports that Business Secretary Lord Mandelson will announce today that the Government is to delay the implementation of the EU's Temporary Agency Workers Directive until October 2011, the latest possible date. Under the Directive, temporary workers will have full employment rights after 12 weeks in the workplace. In addition, the Government will also defer the implementation of other regulations on business, including a planned right for workers to request "time to train", will be deferred for a year until April 2011 for employers with less than 250 staff.

The article also reports that the Government is to commit to a 6.5bn cut in the annual cost of regulation by 2015, and create an advisory Regulatory Policy Committee to scrutinise red tape.
Guardian Mail FT Open Europe briefing: TAWD OE press release Open Europe research: Regulation

France builds coalition around further dairy market intervention
French Agriculture Minister Bruno Le Maire met with Italian Agriculture Minister Luca Zaia in Paris this week, in an effort to strengthen the coalition in favour of dairy market regulation, ahead of an EU Agriculture Ministers Council meeting on 19-20 October. Le Maire also announced that Greece has joined the coalition, meaning the 21 member states in favour of regulation now represent 95 percent of the EU's dairy production, reports Euractiv.

Le Maire added that "we have agreed yesterday [12 October] to unblock an additional 300 million from the 2010 budget to sustain European milk producers" and that "the Common Agricultural Policy aid will be unblocked this Friday for all producers, a month and a half ahead of schedule."
Euractiv LesEchos FrenchDiplomaticService

French Foreign Minister: Lisbon will lead to "a real European defence policy";
European Parliament ready to battle member states on EU diplomatic service
Der Standaard quotes French Foreign Minister Bernard Kouchner saying that the Lisbon Treaty will lead to "a real European defence policy", by creating the High Representative of Foreign Affairs as well as the President of the EU Council. He added this European defence policy would be "the precondition for the diplomacy of a great power".

Meanwhile, European Voice reports that EU member states want a separate status and a separate budget for the EU's External Action Service, which will be created if the Lisbon Treaty comes into effect. They argue this will combine the Commission's experience in managing policies such as development aid and economic co-operation with the Council's expertise on foreign and security policy. It will mean that it will not be wholly controlled by the European Commission or by the Council of Ministers.

However, leading MEPs want the new service to be part of the Commission, because that will entitle the European Parliament to scrutinise the service's budget, granting it a degree of control. The article quotes UK Lib Dem MEP Andrew Duff, who will draft Parliament's opinions on whether to approve the next Commission, saying that if Commission President Jose Manuel Barroso or the future High Representative for Foreign Affairs "fail to give us the guarantees we need on the External Action Service and the budget, we'll fail to appoint him".
Der Standard European Voice

Commission: Agreement at upcoming UN climate change conference possibly out of reach
Handelsblatt reports that the European Commission has warned for the first time that an agreement in the upcoming UN climate change conference in Copenhagen in December is possibly out of reach. Chief negotiator for the EU Commission, Artur Runge-Metzger, says that negotiations are miles away from any agreement, with participants not even agreeing whether the outcome should be a single, internationally binding agreement.

Meanwhile, the FT reports that EU Environment Commissioner, Stavros Dimas, has expressed reservations about a so-called carbon border tax, proposed by France, which foresees tariffs on imports from countries that do not participate in a global climate change treaty. The EU Environment Commissioner says: "I don't think it [the tax] should be used as a means of pressure". Dimas instead argued that poorer countries should be offered financial support to help them to tackle climate change.
Handelsblatt FT

Commission looks to standardise asylum rules across the EU
European Voice reports that the European Commission is expected to announce changes to the rules on those entitled to refugee status and how that decision is made. The article notes that the aim of the Commission is to standardise qualification rules so that no member state is a more attractive destination to asylum-seekers than another.

On his BBC blog, Gavin Hewitt looks at the issue of immigration in the EU and the lack of a common European approach to the number of migrants still coming to the EU during the economic recession.
BBC: Hewitt blog European Voice

GM to announce agreement on sale of Opel to Magna;
FT: Commission must step in to protect the single market
The FT reports that General Motors is set to announce today it has reached a definitive agreement to sell 55 percent of Opel to Magna International and Sberbank, although it has not yet reached agreement with its Spanish workers on the future of Spanish car plants. The deal is still subject to approval by the European Commission, which will decide if loan guarantees from Germany and other EU countries comply with state aid rules. The paper reports that, "One crucial question is whether Jos Manuel Barroso, European Commission president, will want to take on Angela Merkel, the German chancellor, whose government threw its weight behind the Magna bid."

A leader in the paper argues, "the Commission must step in...If the Commission declines to exercise its authority on this matter, the carve-up of the Opel dinosaur may set precedents that do grave damage to the European project's most valuable, unifying and important asset: its single market."
FT: Leader FT FT 2

Commission's EU accession report: Iceland and Croatia 'nearing the finishing line', mixed progress for Turkey and the Balkans
The FT quotes Olli Rehn, EU Enlargement Commissioner, saying that Croatia is "nearing the finishing line" of its membership talks and the article notes that except for Croatia and Iceland no country is expected to meet the necessary standards for joining the EU within the next two to three years. The Commission has recommended the Former Yugoslav Republic of Macedonia should start its accession talks but the article notes that the Commission's report paints a mixed picture of the Balkan countries, ranging from a positive assessment of Montenegro to a bleak account of political tensions in Bosnia-Herzegovina.

On his FT Brussels blog, Tony Barber writes "concerns are growing in Brussels that [French President Nicolas] Sarkozy is contemplating a formal Franco-German initiative next year to offer Turkey a "privileged partnership" instead of, as now, the long-term prospect of full EU membership." Barber notes that with the Social Democrats - sympathetic towards Turkish accession - out of the picture the German government may be more receptive to the idea.
WSJ Die Presse Sueddeutsche RP online Nachrichten.at AP La Razn ABC.es Reuters El Pas ABC.es La Vanguardia FT: Brussels blog EurActiv FT EUobserver EUobserver 2

Britain is in danger of 'going bust', warns Commission
The Mail, Independent and Telegraph report that the European Commission has warned Britain is in danger of 'going bust' due to its high levels of national debt. Britain is reported to have a budget deficit of 13.8%, second only to Ireland which has the biggest in Europe with 15%, and is expected to borrow 200 billion this year. The Treasury has however dismissed the report claiming it has "no basis in reality".
Mail Independent Telegraph EUobserver Telegraph: Conway

A new report from the European Council on Foreign Relations has heavily criticised the EU's peace support efforts around the world and said that many countries fail to live up to the commitments they make. It also describes the EU's civilian power as "largely illusory".
BBC

The leader of the Serbian half of Bosnia, Milorad Diodik, today demanded the right to break up the country as part of a constitutional reform package that is being drawn up with the backing of the EU and the US.
Guardian Presseurop

In the Times, Bronwen Maddox argues that the West's lack of focus is causing Eastern Europe to 'lose direction'. She writes, "This year the economic divide between East and West have been in sharp focus. But the different views of security, and Russia, represent a looming problem that the EU, and the US, cannot afford to neglect."
Times: Maddox

Poland will not be able to adopt the euro until 2014 or 2015, said Polish central banker Halina Wasilewska-Trenkner, in comments that reminded markets that the country is failing to meet all but one euro-adoption criteria and it therefore can't start formal talks on abandoning the zloty.
WSJ

A leader in the WSJ argues against an extension of EU import duties on Chinese and Vietnamese shoes.
WSJ

The FT reports that the EU will today sign a draft trade deal with South Korea. Trade Commissioner Catherine Ashton said she thought the package was "the best we'll ever get."
FT

A leader in the New Statesman looks at the controversy over the Conservatives' new grouping in the European Parliament, European Conservatives and Reformists, and argues that the partnership is the product of "moral and intellectual laziness".
New Statesman: Leader

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